Public relation refers to the manner in which an organization associates itself with the outside world. An organization can never achieve its goals alone; it depends entirely on stakeholders and other concerned parties. Without external support it may be very difficult for an organization to realize any meaningful prosperity in business. An organization’s stakeholders may include customers, the government, creditors, suppliers, community, other organizations, and employees. All are important in the eyes of the organization. Public relation therefore attempts to create an environment where there is no conflict of interest between the organization and its stakeholders. (Garry, 2003)
The purpose of public relation is to preserve and build the image of the organization to the outside world. The more reputable the organization is to its stakeholders, the more it is perceived to increase its market share. A company’s image may sell its products and services to the outside world without the company incurring the actual cost of carrying out expensive and aggressive marketing and advertising campaigns. (KnowThis.com, 1998)
In the modern vibrant economic world, businesses are busy looking for competitive advantages, social networks and viable economic avenues. Good reputation can be a competitive advantage. Globally, there are organizations that are now venturing into franchising business. Quite a number of United owned corporations like Apple, Able, Yahoo, and Google rely on franchising business with other international companies. As the global economy shifts to modern technology, competition has intensified. This has created a lot of pressure on businesses to be dynamic and creative. Public relation is one such way that organizations can sustain competition in an industry. (David, 2006)
Optus is a firm that offers technological services to its clients. Of late there has been information on the press regarding the outage of technicians repaired damage to cable and apologized to their customers for inconvenience. This information may look so small taken on the basis of normal mistakes, but it appears so weighty from a customer perspective. The current economic world has complicated customers’ behavior, while some customers may be price sensitive, studies have shown that most global clients have become quality and service oriented. (Paul, 2008)
In this respect, Optus is likely to find itself in a very awkward position following the damages already caused to clients. Modern customers have become sensitive to entrepreneurs’ actions and behavior in the business environment. Coupled with the fact that competition has become cut throat, it may be very easy to sway customers. Where a firm fails to observe quality standards in its levels of management, the result is significantly conspicuous. In the first place products and services offered will be substandard. Where this becomes the scenario, customers would lose confidence in the activities of the company. Continued non compliance of quality standard can lead to serious damages being caused to clients. The public expectation is that an organization should be able to commit itself into offering quality products at an acceptably reasonable price throughout its life cycle. (Grunig & Todd, 1984)
Optus is a medium sized organization that serves both retail and corporate clients. ISP and Telco’s are just but examples of corporate clients that it serves. It provides ISP with internet cable connections. Besides it is also responsible for repairing and building its internet infrastructure. This implies that ISP is one of its major potential clients. Unfortunately there are already claims in the report supplied by Whirlpool Broadband News that the extent of the outage so far caused is unfathomed. This is a big threat to the company. (Ed.Seitel, 2006)
Queensland Consumers Association has already alleged that ISP customers are likely to experience difficulties. This might lead to huge losses to ISP. If this happens then ISP would have no other choice but to revoke its contract with Optus. A firm must at all cost protect its image in order to continue doing business. As has been discussed above it may take a long duration to build an organization’s image but it simply takes a day to destroy it. Reading the history of Optus one realizes that it has been a very successful Australian IT firm. More studies reveal that it is a company that has multinational relationships as far as the Middle East and the western countries. (Özekmekçi, 2004)By failing to focus on quality, Optus stands to face the following challenges:
- Image/reputation: having provided substandard services to its clients, most customers would shy away from the organization. The cumulative effect is that the market share would reduce significantly. This would be followed by a drastic fall in market share prices. The material impact would be felt by organization at large. As this continue, stakeholders are likely to develop a negative attitude towards the organization and hence creating a public impression that Optus is unethical. (Özekmekçi, 2004)
- Poor Financial performance: when a company is perceived to have poor public relations, only few people would want to be associated with such organizations. Most other management scholars attribute an organization’s profitability to a solid customer base; this can never be achieved through negative publicity. Poor public relation is a recipe for poor financial performance. It may be difficult for creditors to extend any financial assistance to the company. Likewise suppliers and other key stakeholders would cut short their support to Optus. If the company continues to offer unprofessional services that fail to meet the needs and requirements of customers, then Optus is likely to lose customers to its fiercest rivals in the industry. (Burkhardt, 2007)
The role of public relations
Public relation plays a very crucial role in establishing outstanding organizational relationships with the outside world. In today’s modern world, many businesses depend on others for some strategic bilateral and multilateral interests. it is through positive public relations that Optus can hire professionals from other countries, get local labor, outsource certain business units, borrow funds from the government and other private financial institutions, obtain local raw materials, win customers confidence and achieve core objectives. (Özekmekçi, 2004) The role of public relation is therefore as follows:
- Building reputation and image: the framework on which public relation is pinned is to market the organization at both domestic and international levels. This is through establishing links with other organizations, the public and all the stakeholders at large. Most prosperous organizations prioritize on public relations by establishing affective channels of communication in and out of their businesses. (McElreath, 2003)
- Competitive advantage: public relations will ensure that a firm achieves adequate competitive space. Highly reputable organizations may enter into an agreement with other firms to use its brand name in promoting some of their product. This can provide a firm like Optus with a considerable competitive advantage. Contemporary management practices have now been expanded to include franchising. This is only possible where an organization’s brand is acceptable anywhere. (Ed.Seitel, 2006)
- Performance Enhancement: the main reason for marketing the organization to the outside party is to identify new business opportunities in other regions. Establishing good relationships with suppliers, creditors, customers and other stakeholders is to ensure a smooth flow of business. Good customer relationship will lead to increased performance by increasing sales volume. On the other hand where creditors have faith and confidence in the company, they can extend their financial assistance in the form of short and long term loans. This can significantly boost any business operations. (Özekmekçi, 2004)
Optus must double its effort to rebuild its image. It may be that its domestic image has been seriously damaged, this may not be true with the international ratings. However it is equally important that extra steps are taken to prevent any further spread of malicious rumors. (Burkhardt, 2007)
Actual Responses by Optus
The management of Optus has responded to the claims appearing on the Whirlpool Broadband News by offering to compensate its clients affected by the damage. Though it is not clear what sort of compensation it is whether financial or not, according to the law of contract Optus is obliged to perform its contractual duty as stipulated in their agreement. Customers have a right to demand for the services owed to them by Optus. In this case Optus appears to be under pressure to fulfill its contractual duty failure in which it can be sued. (McElreath, 2003)
However, corporate clients are yet to suffer big losses associated with poor internet connections, this must be remedied. Compensation may be relevant to mitigate the likely losses incurred by ISP as a result of underperformance. This is in accordance with contract law. However, it may be very difficult to compensate a retail client who had perhaps gone to browse the internet. The effect is that ISP customers could lose personal touch and confidence hence moving to other organizations. In this situation compensation would be meaningless. (Burkhardt, 2007)
In an attempt to disapprove the Whirlpool Broadband News, Optus went to court seeking legal redress for serious defamation. The management argued that the publication caused huge losses not only to the company but also to its key customers including ISP and Telco. The cumulative impact was adverse on the company. Where a business feels that its reputation has been adversely impaired by the press and media, it has a right to institute a legal proceeding against such acts. (Burkhardt, 2007 Normally it may have been a conspiracy by its rival to try to gain illegal and unfair advantage through the media by supplying false information to confuse customers. However, on this issue it may not have come in good faith. It is true that Optus has caused serious damages to many people including its corporate customer. It is therefore baseless to seek a legal redress to try to divert attention. There is already a public out cry. (Fombrun, 1996)
Immediately the organization realized that there were rumors going round that it had grossly caused potential damages customers, it sent an apology through the media. It is common for corporations to send apologies for wrongful acts. A good corporation would always want to build positive image to the outside world, apology is such mechanisms which an organization can ratify its liability for the public. Ratification can never be a basis for justifying an act of such gravity. Again it may be misinterpreted by other parties to mean a conspiracy. When this happens it may be very difficult to win back the confidence of the public especial customers. Apology was therefore a temporary solution but did not wholly rectify the wrong. (McElreath, 2003)
Optus could have organized seminars in which it could have used to explain to its clients why, how and the prevailing circumstances that might have transpired into the occurrence of the fault. In attendance could have been government authorities, representatives from other organizations, potential corporate clients, banking personalities, suppliers and individual retail consumers. This could have provided aground on which customers could have asked important questions and answers given. Workshops and seminars may also help build customers confidence by meeting them face to face. The verbal expression adds to the advantage of personal touch and contact with potential customers. Workshops and seminars are only suitable for domestic and local customers. However when it comes to foreign customers the relevance becomes seriously constrained. (Fombrun, 1996)
The media and press
Optus could have taken the greatest step to rebuild its reputation through the media. This could have been calling a press conference to explain the decision thereof and to remove the perception developed and the fear caused by the rumors in circulation. They could have also bought a space in the major dailies to further to disown such acts perpetrated by rivals. Since Optus is an international company, customers in the Diaspora could have been sent an online clarification documents through the internet. This would clear Optus from the public outcry. (Burkhardt, 2007)
However, media and press are very expensive. For instance it will cost a lot to print information on the daily newspapers coupled with the fact that not every customer would buy a news paper. Press is only suitable for corporate clients where the organization has their website information that would easily aid direct dispatch of information to final destination. On the other side security concerns become core where Optus decides to send electronic mail to its clients in foreign countries. (Özekmekçi, 2004)
Field personnel officers
It could have been very important to use field personnel experts to meet individual retail customers explaining to them into detail and where possible issue hard copy materials.The use of field personnel is advantageous as it provides an opportunity to meet customers face to face. Studies have shown that face to face communication provides the best and immediate feedback. It was therefore upon Optus to choose this method to reach its customers. The use of field personnel also has the biggest drawback of being limited to local and domestic customers and therefore discriminate overseas clients. However it remains the cheapest method that the company could have used to build its reputation locally. (Bernays, 1945)
Social responsibility is defined as playing multiple roles in a society with a particular emphasis on the welfare the society and the environment. The dynamic economic environment has increased pressure on organizations to focus on the social attributes and requirements of a society. Many business corporations are now turning on social responsibility as a key business objective although there has been a hot debate as to who should bear the cost of social responsibility. On a wider perspective, business organizations perceived as being socially responsive normally earn a positive image from the public. Optus could have undertaken even a single communal project i.e. sponsoring the needy poor children, participating in tree planting activities, donating foodstuff to charitable organizations and etc. This could have built and revived its public reputation. (Jan, 2006)
There is a strong correlation between the company’s image and its industry performance. Strategic management should entail an elongated and aggressive planning system that can be varied to include marketing the organization to the outside world. Optus will have to do all that it can to rebuild its image if has to continue being in operation. Relationship with key organizational stakeholders is the framework for successful development. If Optus continue doing business this way, it will be very difficult to survive in its industry that is highly characterized by a strong competition. As they say that a tidy bed is an oasis of order, an organization must not only be perceived as good it must actually be good in its actions and behavior.
List of References
Bernays, E. (1945). Public Relations. Boston, MA: Bellman Publishing Company.
Burkhardt, R. (2007). Reputation Management in Small and Medium-sized Enterprises. Web.
David, P. (2006). Towards relationship management Public relations at the core of organizational development, Journal of Communication Management, Emerald Group Publishing Limited.
Fombrun, C. (1996). Reputation Realizing Value from the corporate image. Web.
Garry, C. (2003). What is Public Relations. Web.
Grunig, J. E & Todd, H. (1984). Managing public Relations. New York: Holt, Rinehart and Winston. Web.
Jan, S. (2006). The Important Role of Public relations. Web.
KnowThis. (1998). Public Relation. Web.
McElreath, R. (2003). Reputation and the evolution of conflict. Journal of Theoretical Biology, 220(3):345-357.
Özekmekçi, A,.M. (2004).”The Correlation between Corporate Governance and public Relations”, Istanbul Bilgi University.
Paul. (2008). “8 public Relations Trends to Watch“. Web.
Seitel, F. (Ed). (2006). The Practice of public relations. Englewood Cliffs, NJ: 10. Web.